The recommendations are based on a new framework that the School Reform Commission is using in an attempt toend a logjam with the growing sector over its standards and means of evaluation. The framework awards points for academics, organization, and finances, requiring that a charter earn 45 percent of the possible points in each domain to avoid a “does not meet standards” result.

Most of the recommended renewals were for five-year terms. Imhotep charter, a sports powerhouse, was recommended for a one-year extension, mostly due to academic problems.

The Aspira and Universal schools did not meet the financial standards set by the charter office, including debt ratios, cash-on-hand, assets vs. liabilities, and whether revenues are enough to cover obligations. Universal has a high debt ratio and annual expenditures that exceed revenues. Both were cited for not always making timely payments into the state retirement system, intermingling funds from the schools with its other enterprises, and other shortcomings.

The Universal schools approach the academic and organizational standards, while the Aspira schools meet academic standards and approach the organizational benchmarks.

While Imhotep, recommended for just a one-year renewal, scored low on the academic rubrics, the evaluators noted that a new management team had taken over two years ago and wanted to give it more time to improve outcomes.

Freire and Christopher Columbus met standards in two of the three domains, but still had conditions attached. Discovery did not meet organizational standards due to problems with special education, discipline policies, enrollment policies, board governance, and food health and safety issues.

CHAD, recommended for nonrenewal, had a “did not meet standards” rating in all three domains.

The CHAD recommendation cites a steady decline in proficiency rates in English Language Arts, math, and science since 2013-14, and noted that it never exceeded either the overall District average or the scores of peer schools, which are matched based on demographics. The report noted, however, that it had relatively high graduation and college matriculation rates compared to its peer schools.

The process of setting conditions for Philadelphia charter schools emerged in 2014 after Republican State Rep. John Taylor inserted a provision into Mayor Kenney’s cigarette tax legislation that gave jurisdiction to the state Charter Appeals Board to reverse local decisions to deny charters in the city.

The practice is being challenged by Franklin Towne, which wasrecently approved for a new charter with conditions that they remedy various conflicts of interest, accept students from zip codes with high non-white populations, and follow various state laws. Franklin Towne is now preparingan appeal of the decision to impose conditions. The first step is the state Charter Appeals Board, and after that, the courts.

Like Franklin Towne, ASPIRA has used its school buildings to take out large mortgages and then moved that money to other parts of the organization. Both ASPIRA schools are guarantors of a $5 million mortgage, collected by the parent company ASPIRA Community Enterprises Inc., and spent to acquire and construct the Antonia Pantoja’s building. That mortgage matured toward the end of 2017, and ASPIRA is now in negotiations with the bank over an extension of the loan that is now in forbearance.

The principal on this mortgage remains over $4 million but the value of the building it was used to finance is just $1.4 million.

Both schools’ annual revenue was used as security for another $12.7 million mortgage, which was paid to ACE Dougherty LLC — also run by ASPIRA — for the renovation and management of the Cardinal Dougherty building, where ASPIRA houses other schools. This note also matured at the end of 2017 and is now in forbearance, though ASPIRA is negotiating with its bank on this as well.

And like Franklin Towne, ASPIRA was flagged for numerous conflicts of interest. The schools’ landlord, ASPIRA Community Enterprises Inc., is run by officers who are also employees of the school’s management organization, ASPIRA Inc. of PA. The school’s master services agreement with ASPIRA may only require 4 percent of funds, but ASPIRA regularly invoices the school for huge sums on top of that. In 2014 that additional sum was $1 million for Antonia Pantoja, which increased to $2.1 million by 2017.

That accounts for more than 22 percent of the school’s revenue paid by Pantoja to the management company in 2017 — an abnormally high portion in the Philadelphia charter sector.

Eugenio Maria De Hostos has slid so far into debt that ASPIRA had to forgive more than $2 million that the school owed the management company. Still, the schools’ rent is 20 percent higher than the debt service payments for the entire building, even though it is not the only school renting space in that building. It is owned by ACE Dougherty LLC., meaning the rent is effectively set by ASPIRA.

The schools were as also flagged for overlapping board members serving on the boards of different schools concurrently, another practice that Franklin Towne was required to remedy in the conditions they are now appealing.

The School Reform Commission is hoping to vote on these agreements at its June 21 meeting, before it disbands on July 1, along with other charters that have been in limbo for more than a year, if the operators agree. However, that is not certain, with many in the charter sector seeking a modification of the academic standards.

A new nine-member Board of Education appointed by Mayor Kenney will take over governance of the School District on July 1.

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